A partnership firm was converted into a private company and, thereafter, a non-resident company (Umicore) purchased 99.96 per cent shares of said converted company. Conversion of partnership firm was not regarded as a transfer within meaning of section 2(47) and no capital gain was charged to tax in assessment year 2006-07  Assessing Officer held  that, by acquisition of entire share capital by Umicore, it violated mandate of proviso to clause (d) of section 47(xiii) and hence, exemption from capital gain enjoyed by assessee-firm upon conversion into company became chargeable to tax. Umicore approached AAR on taxability of such capital gain. AAR ruled that no capital gain accrued or arose at time of conversion of partnership firm into private company and position did not change in terms of non-compliance of section 47(xiii) by reason of premature transfer of shares. Revenue filed writ against said ruling.  Assessing Officer held that there was short-term capital gain to assessee. Tribunal held that  since AAR ruled that no liability towards capital gain was attracted and High Court affirmed said view point of AAR, no liability could be said to be attracted towards capital gain, whether short-term or long-term. (AY. 2009-10, 2011-12)